Mr Bilahari Kausikan, Chairman, Middle East Institute,
Mr Richard Armitage, former US Deputy Secretary of State,
Dr Kazem Sajjadpour, President, Institute for Political and International Studies, and former Ambassador of Iran to the United Nations, Geneva,
Mr MJ Akbar, former Indian Minister of State for External Affairs,
Distinguished Guests, Ladies and Gentlemen,
1. It is a pleasure to be with you today. Let me start by commending Mr Bilahari Kausikan and his team for putting this Conference together. the topic of our discussions today is especially timely and salient given recent events in the Strait of Hormuz, which have presented great difficulties for the parties involved. They are also a cause for concern to the international community.
2. The situation we are witnessing in the Strait of Hormuz today did not appear in a vacuum. Relations between Iran and the West have been difficult, marked by decades of uneasy coexistence and conflict. In particular, the past forty years have seen a steady decline in US-Iran relations. Tensions have recently ratcheted up while trust between the two nations has eroded, especially with the imposition of sanctions. I shall not pretend to be an expert on the historical origins of friction between the US and Iran. Nor shall I pretend to fully understand all the intricacies of the JCPOA. We do not take sides in this complicated relationship or on this complex issue. Instead, I would like to focus on the broader implications of the ongoing tensions and some of the fundamental principles at stake.
Developments in the Straits of Hormuz
3. Singapore, like many others, is deeply concerned about the escalating tensions in the Strait of Hormuz. The Strait is flanked by the biggest oil producers in the Middle East and remains one of the busiest and most important waterways in the global oil trade. It is a vital global oil chokepoint through which a fifth of global oil transits, or an estimated 21 million barrels of oil per day in 2018.
4. Even without outright conflict, prolonged tensions and instability in the Hormuz Strait will have a detrimental impact on the global oil supply and global economy. The likely upward pressure on oil prices will compound an already weakening global economy. The IMF had previously estimated that a 20% increase in oil prices could lead to a 0.5 to 1.5% decline in global GDP. Amidst the ongoing trade tensions, global economic growth is forecast at a mere 3.2% this year. This marks the slowest global growth rate since the 2008 financial crisis. Growth in trade volume has also declined to about 0.5% year-on-year in the first quarter of 2019 alone, after having dropped below 2% in the fourth quarter of 2018.
5. Moreover, any actual disruption to oil transiting through the Hormuz Strait would hit Asia the hardest. 76% of crude oil and condensates which pass through the Strait are bound for Asian markets, including China, India, Japan and South Korea.
6. As continued tit-for-tat moves will only serve to increase the risk of miscalculation and conflagration, it is in the interest of all parties to avoid escalating tensions or precipitating confrontations in such a vital global oil chokepoint.
Maintaining Peace and Security
7. For Singapore, the issue at hand is not just about the Hormuz Strait, but what it portends for other international waterways and international order generally.
8. Singapore has a strong interest in ensuring that sea lines of communication remain open, free and secure for peaceful and unhindered travel by commercial vessels. This year, we commemorate the Singapore Bicentennial, marking two hundred years since the British East India Company established a free port in Singapore, a significant turning point in our history. Since then, trade has been the lifeblood of our economy, and remains so to this day, where merchandise trade is consistently at two to three times of our GDP.
9. The fact is our standing today as a vibrant and thriving global maritime hub would not have been possible without continued access to secure and open trade routes along our sea lines of communication, namely the Strait of Malacca and the South China Sea. Freedom of navigation is therefore of fundamental interest to us, and indeed, the world economy. All of us should therefore seek to avoid a world where conflicts between littoral states and external powers threaten international sea lines of communications to impede global trade and jeopardise our livelihood.
10. Let me now offer some thoughts on how we see the way forward.
11. First, the overriding priority must be to de-escalate the situation and defuse tensions. We urge all parties to exercise restraint and avoid further unilateral actions that may serve to undermine the freedom and security of commercial vessels passing through the Hormuz Strait. At the same time, vessels should also ensure that they comply fully with navigational rules meant to ensure the safety of all users. Second, we encourage parties to return to the negotiating table. Diplomacy and dialogue are key to reinstating stability, as opposed to force or even the threat of force. Any long-term solution must be rules-based and take into account the interests of all relevant parties. Such a process, however, takes considerable effort and perseverance, and compromise and giving weight to the core interests of other parties is never an easy task. Nonetheless, a conducive and friendly international environment is ultimately beneficial for all parties in the long term.
12. The fundamental principle that international agreements, once signed, should be honoured, is a key interest to small states like Singapore. This principle is the foundation of certainty and stability in the international order.
13. From this perspective, the JCPOA, although certainly not perfect, and did not erase the mistrust between Iran and the US, or resolve longstanding issues, nevertheless helped manage differences and de-escalate tensions. It was a delicately balanced accord which bridged the interests of all parties and, in the long-run, may have served to build confidence between the parties directly involved. For these reasons, the JCPOA was welcomed by many in the international community, including Singapore.
14. Singapore is not situated along the Strait of Hormuz, nor are we party to the JCPOA. But we hope that all parties will act with pragmatism to resolve tensions amicably. A peaceful and stable Strait of Hormuz which remains conducive for trade is ultimately in everyone’s interest. Singapore will continue to monitor developments very closely, and will be pragmatic in taking the necessary measures to safeguard our interests. It is our hope that the US and Iran, along with other members of the international community, can continue to work towards a solution founded in rules.
15. This Conference has brought together many distinguished experts and former policymakers in the international arena. Almost all the parties directly involved are represented. Although their views may not represent those of governments, I am hopeful that the discussions today will be balanced, insightful and at least offer us a glimpse of the way forward.
16. The world we live in today is extremely unpredictable, and countries should work together to maximise our chances of acting in wisdom, and opt for openness, peace and cooperation, so as to preserve and expand progress which we have made together.
17. Thank you.